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The heads of the Korean and US economy agreed to cooperate in liquidity supply if financial instability intensifies. They also shared the view that Korea maintains solid external resilience based on good foreign exchange liquidity and sufficient foreign exchange reserves.
According to the Ministry of Strategy and Finance on the 1st, Deputy Prime Minister and Minister of Strategy and Finance Choo Kyung-ho had a conference call with US Treasury Secretary Janet Yellen at 8 pm Korean time the previous day. This is the fourth official meeting between the finance ministers of the Republic of Korea and the United States, and in the conference call that day, recent global economic trends, ways to cooperate in the foreign exchange market, and the US Inflation Reduction Act ( IRA). ) discussed.
The two Ministers shared a consensus on the fact that uncertainty in the global real economy and financial markets is growing due to less global liquidity and the protracted war between Russia and Ukraine. Diagnosing additional downside risks, such as the European energy crisis from Russia and the debt crisis in emerging countries, the two countries agreed to continue to communicate and coordinate closely.
Under such circumstances, Deputy Prime Minister Choo and Minister Yellen agreed to work closely together to implement a liquidity supply mechanism in case financial instability intensifies due to the spread of the liquidity crunch in major countries including Korea. Although the economic crisis in major countries in Europe or Asia has not yet emerged, it is interpreted to mean that liquidity supply devices such as currency exchange can be prepared in case of a crisis. The two Ministers also shared the view that the external soundness of the Korean economy is good, although the dollar-earning exchange rate has been rising rapidly.
Deputy Prime Minister Choo said, “The harsh global financial environment is placing a significant burden on our economy.
On the 16th of last month, Deputy Prime Minister Choo expressed to Minister Yellen that concerns are spreading around the Korean electric vehicle industry and the National Assembly as the IRA gives tax credit benefits to North American electric vehicles in lonely He also encouraged them to pay special attention to resolving the matter. Secretary Yellen thanked the ROK for sharing her position and said that the two countries should continue to work closely together.
In addition, the two Ministers shared the progress of Russia’s crude oil price cap system, an international regulatory measure for Russia, and discussed ways to support developing countries’ response to climate change through the Green Climate Fund (GCF). They also exchanged views on the World Bank’s Pandemic Response Financial Intermediation Fund (FIF), to which Korea will contribute $30 million.
Correspondent Hwang Jung-hwan jung@hankyung.com
